{"id":218356,"date":"2025-01-18T12:01:25","date_gmt":"2025-01-18T12:01:25","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2025\/01\/18\/when-the-u-s-hit-canada-with-steep-tariffs-before-canada-had-a-plan-b\/"},"modified":"2025-01-18T12:01:25","modified_gmt":"2025-01-18T12:01:25","slug":"when-the-u-s-hit-canada-with-steep-tariffs-before-canada-had-a-plan-b","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2025\/01\/18\/when-the-u-s-hit-canada-with-steep-tariffs-before-canada-had-a-plan-b\/","title":{"rendered":"When the U.S. Hit Canada With Steep Tariffs Before, Canada Had a Plan B"},"content":{"rendered":"<div style=\"text-align:center\"><img decoding=\"async\" src=\"https:\/\/i0.wp.com\/static01.nyt.com\/images\/2025\/01\/18\/multimedia\/18canadaletter-windsor-wjtp\/18canadaletter-windsor-wjtp-facebookJumbo.jpg?ssl=1\" class=\"attachment-post-thumbnail size-post-thumbnail wp-post-image\" alt=\"When the U.S. Hit Canada With Steep Tariffs Before, Canada Had a Plan B\" title=\"When the U.S. Hit Canada With Steep Tariffs Before, Canada Had a Plan B\" \/><\/div><p> <br \/>\n<\/p>\n<div data-testid=\"companionColumn-0\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">After Donald J. Trump\u2019s presidential inauguration on Monday, Canadians will learn whether he intends to follow through on his threat to immediately impose 25 percent tariffs on exports from Canada to the United States.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-2\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Many people here have told me they are looking forward to the details of the federal government\u2019s response to any American trade action. Matina Stevis-Gridneff, our Canada bureau chief, reports that it will be much like Canada\u2019s response to the tariffs on aluminum and steel that Mr. Trump introduced during his first administration. Any coming retaliatory tariffs, she writes, will \u201cfocus on goods made in Republican or swing states, where the pain of tariffs, like pressure on jobs and the bottom lines of local businesses, would affect Trump allies.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\"><em class=\"css-2fg4z9 e1gzwzxm0\">[Read: <\/em><a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/01\/17\/world\/canada\/canada-trump-tariffs.html\" title=\"\"><em class=\"css-2fg4z9 e1gzwzxm0\">Canada\u2019s Plan for a Trade War: Pain for Red States and Trump Allies<\/em><\/a><em class=\"css-2fg4z9 e1gzwzxm0\">]<\/em><\/p>\n<p class=\"css-at9mc1 evys1bk0\">But given the size of Canada\u2019s economy, the country cannot inflict the same amount of harm that the United States can. That raises the question of whether retaliation, no matter how politically targeted, will be effective.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">There is, of course, no way to answer that question. But an earlier trade war between Canada and the United States might offer some indications of what\u2019s to come.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Back in 1930, as today, the North American neighbors were each other\u2019s largest trading partner. But the mix of goods was quite different: For one thing, Canada was importing most of its oil from the United States, while today oil and gas are Canada\u2019s largest exports.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">A movement by American farmers to close off competition from imports, including those from Canada, to bolster prices ballooned into a sweeping piece of legislation known as the Smoot-Hawley Tariff Act. It raised already high U.S. tariffs, eventually bringing the average import duty to a staggering 59.1 percent.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-3\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Then as now, the tariffs were denounced by many economists. Over 1,000 of them unsuccessfully petitioned President Herbert Hoover to veto the bill.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Historians and economists still debate the effect of Smoot-Hawley on the Great Depression. But <a class=\"css-yywogo\" href=\"https:\/\/www.jstor.org\/stable\/2951161?seq=7\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">a 1997 paper<\/a> by three economists at Lehigh University in Pennsylvania documents how it harmed Canada\u2019s economy and profoundly influenced its politics.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Most of the seven largest exports from Canada to the United States at the time, the paper says, had large declines. Exports of milk and cheese plunged by 65 percent, and cattle sales to the United States fell by 84 percent.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Before Smoot-Hawley, <a class=\"css-yywogo\" href=\"https:\/\/www.thecanadianencyclopedia.ca\/en\/article\/william-lyon-mackenzie-king\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">William Lyon Mackenzie King<\/a>, the Liberal prime minister, had been planning to reduce tariffs on Canadian imports of U.S. goods. In the hope of avoiding a trade war, Mackenzie King matched the new U.S. tariffs on only 16 products, which accounted for 30 percent of imports from the United States.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-4\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">Like Prime Minister Justin Trudeau today, Mackenzie King led a minority government. He passed bills with the support of the Progressives, a party supported largely by farmers.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-5\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">During the 1930 election campaign, <a class=\"css-yywogo\" href=\"https:\/\/www.thecanadianencyclopedia.ca\/en\/article\/richard-bedford-viscount-bennett\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">R.B. Bennett, the Conservative leader<\/a>, relentlessly attacked Mackenzie King for not retaliating more forcefully against the United States.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Bennett\u2019s speeches about the merits of high tariffs were remarkably similar to Mr. Trump\u2019s social media posts on the topic today.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cHow many tens of thousands of American workmen are living on Canadian money today?\u201d he said while campaigning in Quebec. \u201cThey\u2019ve got the jobs, and we\u2019ve got the soup kitchens.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">He promised the crowd that he would use tariffs to \u201cblast a way into markets that have been closed.\u201d<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-6\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">A vote analysis in the Lehigh paper concludes that tariff issues were a key factor in Bennett\u2019s victory in the 1930 election, which brought the Conservatives their only majority government between 1911 and 1958.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">While Bennett did increase tariffs, they failed to blast a way into any market, according to Robert Bothwell, an emeritus professor of Canadian history at the University of Toronto.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">But, Professor Bothwell told me, Bennett found another solution, which involved expanding on one of Mackenzie King\u2019s actions: When he imposed the tariffs on U.S. goods, Mackenzie King also cut them on 270 products from Britain and other countries within its empire.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Bennett hosted a <a class=\"css-yywogo\" href=\"https:\/\/www.britannica.com\/money\/imperial-preference#ref115604\" title=\"\" rel=\"noopener noreferrer\" target=\"_blank\">conference in Ottawa<\/a> that led to a series of agreements between Britain and its former colonies that greatly opened up trade between them by reducing and in some cases eliminating tariffs.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">That arrangement, Professor Bothwell said, could neither offset the economic collapse of the Depression nor fully replace the American market for Canadian exports, but it did greatly mitigate the harm caused by Smoot-Hawley.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-7\">\n<div class=\"css-53u6y8\">\n<p class=\"css-at9mc1 evys1bk0\">\u201cWe had an out of sorts, and it really did work in the \u201930s,\u201d he said. \u201cEvery time the Americans jacked up their tariffs, we would tend to trade more with the British.\u201d<\/p>\n<p class=\"css-at9mc1 evys1bk0\">When Franklin D. Roosevelt succeeded Hoover as U.S. president in 1933, Professor Bothwell said, his administration soon noticed the loss of exports to Canada, driven by the combination of American tariffs and the Imperial arrangement with Britain, and moved to compromise on trade.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">Today there is talk that Canada will again try to build up exports with nations other than the United States. But Professor Bothwell said that changes in trade, manufacturing and transportation have made a repeat unlikely.<\/p>\n<p class=\"css-at9mc1 evys1bk0\">\u201cWe don\u2019t have an obvious alternative,\u201d he said. \u201cI don\u2019t see us having a way to absorb the same amount of exports as we did in the \u201930s.\u201d<\/p>\n<hr class=\"css-7ad88g e1mu4ftr0\"\/><\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<div data-testid=\"companionColumn-9\">\n<div class=\"css-53u6y8\">\n<ul class=\"css-1le37cb ez3869y0\">\n<li class=\"css-1i3ul0c eoqvrfo0\">\n<p class=\"css-1il0jfh evys1bk0\"><a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/01\/16\/world\/canada\/mark-carney-liberal-party-leader-campaign.html\" title=\"\">Mark Carney<\/a>, former governor of the Canadian and British central banks, and <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/01\/17\/world\/canada\/chrystia-freeland-justin-trudeau-canada-prime-minister.html\" title=\"\">Chrystia Freeland<\/a>, the former deputy prime minister, have both officially announced their campaigns to succeed Prime Minister Justin Trudeau as the Liberal Party leader.<\/p>\n<\/li>\n<li class=\"css-1i3ul0c eoqvrfo0\">\n<p class=\"css-1il0jfh evys1bk0\">With the Buffalo Bills and the Detroit Lions <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/01\/12\/business\/nfl-canada-fans-bills-lions.html\" title=\"\">both Super Bowl contenders<\/a>, N.F.L. fans in Canada have two border city teams to cheer for.<\/p>\n<\/li>\n<li class=\"css-1i3ul0c eoqvrfo0\">\n<p class=\"css-1il0jfh evys1bk0\">Canada is <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/01\/11\/us\/mexico-canada-firefighters-california.html\" title=\"\">sending air tankers and dozens of its battle-tested wildland firefighters<\/a> to Los Angeles.<\/p>\n<\/li>\n<li class=\"css-1i3ul0c eoqvrfo0\">\n<p class=\"css-1il0jfh evys1bk0\">Home security-camera footage shows a puff of smoke, along with the sound of an explosion, as a <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/01\/16\/science\/meteorite-debris-security-camera-canada.html\" title=\"\">meteorite lands in Charlottetown<\/a>.<\/p>\n<\/li>\n<li class=\"css-1i3ul0c eoqvrfo0\">\n<p class=\"css-1il0jfh evys1bk0\">In a lawsuit, Drake accused his own record label, Universal Music Group, of <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/01\/15\/arts\/music\/drake-kendrick-lamar-lawsuit-not-like-us.html\" title=\"\">putting his life and his reputation at risk<\/a> by releasing and promoting a popular diss track by his musical rival Kendrick Lamar.<\/p>\n<\/li>\n<li class=\"css-1i3ul0c eoqvrfo0\">\n<p class=\"css-1il0jfh evys1bk0\">In Opinion, the Times columnist Ross Douthat makes the case for <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/01\/11\/opinion\/columnists\/o-canada-come-join-us.html\" title=\"\">Canada\u2019s joining the United States<\/a>. <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/01\/08\/opinion\/canada-51st-state-trump.html\" title=\"\">Two readers respond<\/a> with letters declining the invitation.<\/p>\n<\/li>\n<\/ul>\n<hr class=\"css-7ad88g e1mu4ftr0\"\/>\n<p class=\"css-798hid etfikam0\"><strong class=\"css-8qgvsz ebyp5n10\"><a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/by\/ian-austen\" title=\"\">Ian Austen<\/a><\/strong><strong class=\"css-8qgvsz ebyp5n10\"> reports on Canada for The Times based in Ottawa. He covers politics, culture and the people of Canada and has reported on the country for two decades. He can be reached at <\/strong><strong class=\"css-8qgvsz ebyp5n10\"><a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/01\/18\/world\/canada\/mailto:austen@nytimes.com\" title=\"\">austen@nytimes.com<\/a><\/strong><strong class=\"css-8qgvsz ebyp5n10\">. <\/strong><strong class=\"css-8qgvsz ebyp5n10\"><a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/by\/ian-austen\" title=\"\">More about Ian Austen<\/a><\/strong><\/p>\n<hr class=\"css-7ad88g e1mu4ftr0\"\/>\n<p class=\"css-at9mc1 evys1bk0\"><strong class=\"css-8qgvsz ebyp5n10\">How are we doing?<\/strong><br \/>We\u2019re eager to have your thoughts about this newsletter and events in Canada in general. Please send them to <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/2025\/01\/18\/world\/canada\/mailto:nytcanada@nytimes.com?%20subject=Canada%20Letter%20Newsletter%20Feedback\" title=\"\">nytcanada@nytimes.com<\/a>.<\/p>\n<p class=\"css-at9mc1 evys1bk0\"><strong class=\"css-8qgvsz ebyp5n10\">Like this email?<\/strong><br \/>Forward it to your friends, and let them know they can sign up <a class=\"css-yywogo\" href=\"https:\/\/www.nytimes.com\/newsletters\/canada-letter?smid=nytemail&amp;smvar=canadaletter&amp;te=1&amp;nl=canada-today&amp;emc=edit_cnda_20190622\" title=\"\">here<\/a>.<\/p>\n<\/div>\n<aside class=\"css-ew4tgv\" aria-label=\"companion column\"\/><\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.nytimes.com\/2025\/01\/18\/world\/canada\/us-canada-trade-war-1930s.html\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>After Donald J. Trump\u2019s presidential inauguration on Monday, Canadians will learn whether he intends to follow through on his threat to immediately impose 25 percent tariffs on exports from Canada to the United States. Many people here have told me they are looking forward to the details of the federal government\u2019s response to any American [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":218357,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","fifu_image_url":"https:\/\/static01.nyt.com\/images\/2025\/01\/18\/multimedia\/18canadaletter-windsor-wjtp\/18canadaletter-windsor-wjtp-facebookJumbo.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[740,165435,163575,1028,164053,736,137131,164052,172026,1328,18165,52,221,128437],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/218356"}],"collection":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/comments?post=218356"}],"version-history":[{"count":1,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/218356\/revisions"}],"predecessor-version":[{"id":218358,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/218356\/revisions\/218358"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media\/218357"}],"wp:attachment":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media?parent=218356"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/categories?post=218356"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/tags?post=218356"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}